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Off balance sheet financing

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Can you explain to me what off-balance-sheet financing is. What are the benefits of off-balance-sheet financing and what are the drawbacks?

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Any form of financing, such as an operating lease, which, for financial reporting purposes, is not required to be reported on a firm's balance sheet is known as Off-balance sheet financing. A lease that qualifies as an Operating Lease for the lessee's financial accounting purposes. Such leases ...

Solution Summary

The solutions explains the advantages and disadvantages for off-balance sheet financing.